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Opinion: Canadian companies must prepare for disruptors to come knocking
July 26, 2019 | The Globe and Mail | by JOHN RUFFOLO.

In August, 2011, technology legend Marc Andreessen wrote his seminal article titled Why Software Is Eating the World, which became the central investment thesis behind his venture capital firm Andreessen Horowitz. Andreessen’s prognostication has since followed Amara’s Law on the effect of technology, which aptly states: “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” [JCK: See also Andy Kessler's definition of S-Curves "Technology develops in S curves: Things start slow, go into hyperbolic growth, and then roll over. "] The feast has really just begun.

We are in the midst of the Fourth Industrial Revolution – or as some call it, the Information Revolution.....the Information Revolution really began to take shape in 2008, catalyzed by three incredibly powerful and converging forces – mobility-first, cloud computing and social media. All three forces collided together with full impact in 2008, spawning a wave of new technology companies.......The next phase of the Fourth Industrial Revolution will see the rise of a new species of company – the “disruptors.” While technology companies will continue to grow, we are witnessing the enablement of those technologies across all economic sectors as the leading weapon used by new entrants to disrupt the traditional incumbents in their respective industries. The massive influx of venture capital to support the building and growth of technology companies over the past 10 years has produced these tools, such as artificial intelligence, machine learning, and the internet of things, which are now being leveraged across all industries......Those companies that can harness these new technologies to operate better and faster, and to gain unmatched insights into their customers, will prosper. Although these disruptors are not technology companies in the conventional sense, their tight focus on value creation through innovation further blurs the lines between a technology company and a traditional company.

The incumbents, however, are not asleep at the wheel. To ward off the disruptors, they know they must embrace technology. It is this battleground that I believe will generate the greatest wealth creation and transfer opportunities over the next decade. The disruptors, naturally, are particularly active in those industries where they perceive the incumbents to be burdened by outdated technological infrastructure or business models, and hard-pressed to counterattack.

Yesterday, the disruptors focused primarily on consumer sectors such as the music industry, travel booking, newspapers, magazines and book publishing. Today, it’s groceries, entertainment and personal transportation, thanks to Amazon, Netflix and Uber, respectively.

But consumer-focused sectors were just the start for the disruptors. Before long, I believe we will see them try to disrupt varied industries such as banking, insurance, health care, real estate and even agriculture and mining; no industry will be immune. These sectors all represent emblematic Canadian brands, and yes, each will in turn will go through the same jarring disruption as so many others.
************************************************
See [Why It’s Not Enough Just to Be Disruptive - The New York Times
By JEREMY G. PHILIPS AUG. 10, 2016] Creating enormous value over the long term requires turning a tactical edge into some form of durable advantage....Superior tactical execution can still create real value, particularly where it provides ammunition for a bigger war (like Walmart’s battle with Amazon). And in the long term, value is created not by disruption, but by weaving together advantages (as both Amazon and Walmart have done in different ways) that together create a barrier that is hard to storm.
Amara's_Law  artificial_intelligence  cloud_computing  digital_savvy  disruption  incumbents  insurgents  investment_thesis  John_Ruffolo  legacy_tech  Marc_Andreessen  mobility_first  overestimation  S-curves  social_media  software_is_eating_the_world  start_ups  technology  underestimation  venture_capital 
july 2019 by jerryking
Why Andreessen Horowitz Models Itself After A Hollywood Talent Agency - Venture Capital Dispatch - WSJ
By DEBORAH GAGE
Jan 21, 2011

Andreessen Horowitz’s investors, including university endowments, foundations and funds of funds, are also betting big money on the firm’s story, Horowitz says. The firm aims to flip the venture industry on its head by acting more like a talent agency – specifically Creative Artists Agency, which became so prominent in Hollywood that it was hard to do deals without them being involved.

CAA co-founder Michael Ovitz, who served on Opsware’s board from 2000 until H-P’s acquisition in 2007, shared his secrets with the two partners, Horowitz said — even talking to Andreessen Horowitz’s employees when the firm started so that everybody could be on the same page.

Horowitz says he and Andreessen looked hard at everything Ovitz did, “and a lot of little things, we copied,” including even how Ovitz ran staff meetings.

Like CAA – and unlike more traditional venture capital firms – Andreessen Horowitz employs over 20 well-paid partners whose job is to help clients, i.e. the entrepreneurs, much in the same way CAA agents serve the talent.

Instead of book and movie and TV deals, the partners, each specialists in their fields, find engineers, designers, and product managers; the best marketing and public relations; and relationships with key customers – not just top management, but the guys who run the network and the database. They check references, and research companies and markets.

“When we were at Netscape, John Doerr introduced us to the CEO of AT&T,” Horowitz said. “That’s great, but he’s not buying a Web server. If you have no relationship at that level, it’s not as powerful, so we invest a lot in that.”...Like his firm, Horowitz believes every company should have a great story, too, because it motivates employees and helps explain the company to the outside world. “In a company, hundreds of decisions get made, but objectives and goals are thin,” he says. “I emphasize to CEOs, you have to have a story in the minds of the employees. It’s hard to memorize objectives, but it’s easy to remember a story.”
Andreessen_Horowitz  Marc_Andreessen  Ben_Horowitz  creating_valuable_content  Michael_Ovitz  CAA  partnerships  insights  professional_service_firms  talent_representation  storytelling  reference-checking 
march 2017 by jerryking
Computing Beyond Moore’s Law - The CIO Report - WSJ
Apr 8, 2016 GUEST VOICES
Computing Beyond Moore’s Law
ARTICLE
COMMENTS (3)
CHIPS
INTEL
MOORE'S LAW
14
By IRVING WLADAWSKY-BERGER
Moore's_Law  software  evolution  cloud_computing  Marc_Andreessen  Irving_Wladawsky-Berger 
april 2016 by jerryking
The Mind of Marc Andreessen - The New Yorker
MAY 18, 2015 | New Yorker | BY TAD FRIEND.

Doug Leone, one of the leaders of Sequoia Capital, by consensus Silicon Valley’s top firm, said, “The biggest outcomes come when you break your previous mental model. The black-swan events of the past forty years—the PC, the router, the Internet, the iPhone—nobody had theses around those. So what’s useful to us is having Dumbo ears.”* A great V.C. keeps his ears pricked for a disturbing story with the elements of a fairy tale. This tale begins in another age (which happens to be the future), and features a lowborn hero who knows a secret from his hardscrabble experience. The hero encounters royalty (the V.C.s) who test him, and he harnesses magic (technology) to prevail. The tale ends in heaping treasure chests for all, borne home on the unicorn’s back....Marc Andreessen is tomorrow’s advance man, routinely laying out “what will happen in the next ten, twenty, thirty years,” as if he were glancing at his Google calendar. He views his acuity as a matter of careful observation and extrapolation, and often invokes William Gibson’s observation “The future is already here—it’s just not very evenly distributed.”....Andreessen applies a maxim from his friend and intellectual sparring partner Peter Thiel, who co-founded PayPal and was an early investor in LinkedIn and Yelp. When a reputable venture firm leads two consecutive rounds of investment in a company, Andreessen told me, Thiel believes that that is “a screaming buy signal, and the bigger the markup on the last round the more undervalued the company is.” Thiel’s point, which takes a moment to digest, is that, when a company grows extremely rapidly, even its bullish V.C.s, having recently set a relatively low value on the previous round, will be slightly stuck in the past. The faster the growth, the farther behind they’ll be....When a16z began, it didn’t have even an ersatz track record to promote. So Andreessen and Horowitz consulted on tactics with their friend Michael Ovitz, who co-founded the Hollywood talent agency Creative Artists Agency, in 1974. Ovitz told me that he’d advised them to distinguish themselves by treating the entrepreneur as a client: “Take the long view of your platform, rather than a transactional one. Call everyone a partner, offer services the others don’t, and help people who aren’t your clients. Disrupt to differentiate by becoming a dream-execution machine.”
Marc_Andreessen  Andreessen_Horowitz  Silicon_Valley  transactional_relationships  venture_capital  vc  Peter_Thiel  long-term  far-sightedness  Sequoia  mindsets  observations  partnerships  listening  insights  Doug_Leone  talent_representation  CAA  mental_models  warning_signs  signals  beforemath  unevenly_distributed  low_value  extrapolations  acuity  professional_service_firms  Michael_Ovitz  execution  William_Gibson 
may 2015 by jerryking
Lunch with the FT: Marc Andreessen
January 16, 2015 | - FT.com | Caroline Daniel.

As a child, Andreessen was fascinated by technology. “I have the complete series of Tom Swift from the 1910s to 1950s in my office. That was probably the single most important thing I read,” he says of the science-fiction and adventure books featuring a teenaged inventor hero (Tom Swift and his Photo Telephone was one 1912 title). “I liked all the stuff he’s inventing.”
Marc_Andreessen  Silicon_Valley  entrepreneurship  virtual_currencies  crypto-currencies  digital_currencies  currencies  metacurrencies  Andreessen_Horowitz  Twitter  the_single_most_important 
january 2015 by jerryking
Technology will hurt the banks, not kill them
October 15, 2014 | FT.com |John Gapper

Does Silicon Valley really want to blow up retail banking and create an entirely new financial system, or would it prefer to ride on the existing one?...Mr Andreessen, a partner of the venture fund Andreessen Horowitz, added in an interview with Bloomberg Markets magazine last week: “To me, it’s all about unbundling the banks. There are regulatory arbitrage opportunities every step of the way. If the regulators are going to regulate banks, then you’ll have non-bank entities that spring up to do the things that banks can’t do.”...There is no doubt that the infrastructure of retail banks is antiquated, and is built in a way that invites competition from peer-to-peer networks. Nor is there a doubt that banks make themselves vulnerable by how they price – offering core deposit services cheaply or free while squeezing customers on ancillary products such as overdrafts and currency exchange....what is the best way to compete with an industry that makes little from a capital-intensive, regulated service with formidable barriers to entry, and a lot from less protected add-ons? The question answers itself, which is why Silicon Valley focuses on payments while talking about disrupting lending....US laws made it impossible to establish a national credit union open to any customer....One growth area in UK finance has been online payday lending by companies such as Wonga, which promised to extend banking to the underserved. ... tech companies can improve on credit scoring by scanning search histories and social network data...The biggest barrier to competition is that the core business of taking in deposits and keeping them safe is not very profitable in a low-interest world....A start-up bank that has no branches and spends less on patching up legacy software might do this more efficiently – and good luck to those that penetrate the regulatory thicket and try. But it is much less risky to attach a new service to the existing banking infrastructure, and it absorbs less capital....Technology may eventually change the infrastructure of banking but it will not happen soon....“is a long-term threat that will play out over decades, not months or years”...Silicon Valley will compete at the edges, where banks make their best profits.
banks  Silicon_Valley  Marc_Andreessen  Andreessen_Horowitz  disruption  fin-tech  start_ups  Bitcoin  financial_services  underserved  unbanked  regulators  P2P  payday_lending  credit_scoring  low-interest  branchless  capital-intensity  legacy_tech  regulatory_arbitrage  financial_system 
october 2014 by jerryking
Andreessen Horowitz Invests in 'Big Data' Analytics Firm Adatao - NYTimes.com
By WILLIAM ALDEN AUGUST 7, 2014.

Andreessen Horowitz and the other investors in the round, which include Lightspeed Venture Partners and Bloomberg Beta, are betting that companies will embrace Adatao’s subscription-based software. The software, which aims to combine analytical rigor with intuitive design, lets companies search for patterns in the troves of data they collect in their regular course of business.

Christopher T. Nguyen, the chief executive and co-founder of Adatao, said he had already signed up customers in telecommunications and finance, though he declined to identify them.
massive_data_sets  Andreessen_Horowitz  pattern_recognition  Marc_Andreessen  subscriptions 
august 2014 by jerryking
Silicon Valley innovation: Venture capital is not the problem.
JULY 9, 2014 |Slate | By David Auerbach.

Are venture capitalists ruining Silicon Valley? Has Silicon Valley jumped the shark? Wall Street Journal tech writer Christopher Mims thinks so. “The entire Bay Area appears to have given up on solving anything but its own problems,” he writes. Instead of revolutionizing the world with basic research in safety, energy, and medicine, Mims writes, venture capitalists are unimaginatively chasing advertising dollars and focusing exclusively on the first-world segment of twentysomething yuppies. T
broad-based_scientific_enquiry  Christopher_Mims  fundamental_discoveries  innovation  Marc_Andreessen  Silicon_Valley  unimaginative  vc  venture_capital 
july 2014 by jerryking
From Andreessen, a Lesson in Corporate Finance - NYTimes.com
By WILLIAM ALDEN APRIL 17, 2014

In a series of tweets on Thursday, Mr. Andreessen offered a framework for thinking about technology valuations — relying on metrics that hard-nosed financiers tend not to consider.

3/Value of company X to acquirer Y often = Potential impact to acquirer Y's business -- which has a lot more to do with Y than X.

4/For example, in product businesses, you'll often hear term "attach rate" -- acquirer Y can attach company X's product to Y's sales engine.

5/Ex: I sell $20B of servers/year; I buy storage company X doing $100M revenue/year; & I can attach X's product to 20% of my server sales.

6/Ex cont'd: I can generate new $20B*20% = $4B/year of storage sales attached to my server business. X's standalone revenue is irrelevant.

7/Ex cont'd: So I can pay up for storage company X based on its projected impact on MY business, way beyond X's independent valuation.
Marc_Andreessen  Andreessen_Horowitz  corporate_finance  start_ups  valuations  standalone  frameworks  software  mergers_&_acquisitions  M&A 
june 2014 by jerryking
A Vision of the Future From Those Likely to Invent It - NYTimes.com
May 2, 2014 | NYT | By CLAIRE CAIN MILLER and CHI BIRMINGHAM. Claire Cain Miller writes about tech for The Upshot, a New York Times venture that presents news, analysis and graphics about politics and policy

“Start new businesses that create jobs and solve real problems. Also, someone could create a Khan Academy that focuses on professional and vocational skills.”
REID HOFFMAN

“There is a bow wave of uncounted billions of dollars of philanthropic contributions that will unfold over the next 10 to 20 years from Silicon Valley.”
MARC ANDREESSEN
bow_waves  Claire_Cain_Miller  technology  future  trends  Reid_Hoffman  Marc_Andreessen  Peter_Thiel  personalized_medicine  Silicon_Valley  disruption  drones  new_businesses  philanthropy 
may 2014 by jerryking
Tech startups: A Cambrian moment | The Economist
Jan 18th 2014

the world of startups today offers a preview of how large swathes of the economy will be organised tomorrow. The prevailing model will be platforms with small, innovative firms operating on top of them. This pattern is already emerging in such sectors as banking, telecommunications, electricity and even government. As Archimedes, the leading scientist of classical antiquity, once said: “Give me a place to stand on, and I will move the Earth.”....yet another dotcom bubble that is bound to pop. Indeed, the number of pure software startups may have peaked already.... warns Mr Andreessen, who as co-founder of Netscape saw the bubble from close by: “When things popped last time it took ten years to reset the psychology.” And even without another internet bust, more than 90% of startups will crash and burn.

But this time is also different, in an important way.

the basic building blocks for digital services and products—the “technologies of startup production”,...Some of these building blocks are snippets of code that can be copied free from the internet, along with easy-to-learn programming frameworks (such as Ruby on Rails). Others are services for finding developers (eLance, oDesk), sharing code (GitHub) and testing usability (UserTesting.com). Yet others are “application programming interfaces” (APIs), digital plugs that are multiplying rapidly....Startups are best thought of as experiments on top of such platforms, testing what can be automated in business and other walks of life. Some will work out, many will not. Hal Varian, Google’s chief economist, calls this “combinatorial innovation”. In a way, these startups are doing what humans have always done: apply known techniques to new problems. The late Claude Lévi-Strauss, a French anthropologist, described the process as bricolage (tinkering)..... software (which is at the heart of these startups) is eating away at the structures established in the analogue age....this special report will explain how start-ups operate, how they are nurtured in accelerators and other such organisations, how they are financed and how they collaborate with others. It is a story of technological change creating a set of new institutions which governments around the world are increasingly supporting.
anthropologists  Archimedes  bubbles  Cambrian_explosion  dotcom  entrepreneurship  Greek  Hal_Varian  innovation  innovation_policies  Marc_Andreessen  millennials  platforms  software_is_eating_the_world  start_ups  taxonomy  technological_change  urban 
february 2014 by jerryking
In Search of the Next Big Thing
May 2013 | HBR | Adi Ignatius interviews Marc Andreessen.

Tries to find CEOs who are product innovators, have bandwidth and discipline to become CEO. It is hard to pair those skills if they do not reside in one person. It is easier to train an innovator to become CEO than to train a CEO to become an innovator. Andreessen is counter-intuitive: he went into venture capital precisely because the prior decade to his launch had been the worst decade in the industry's history. He believes in cycles and so thought that 2009 was a good time to launch Andreessen Horowitz... Take/Understand a long view....Build "fortresses"--a company so big, so powerful , so well defended that it can withstand the pressures of going public. Focus on the substance of what your company is all about. Be about the substance....companies that are built to be independent are the most attractive...generally companies need to have at least two years' worth of cash on the balance sheet in case your revenue goes to zero....takes sales and marketing seriously--lots of products are being sold and you need a way to get the word about your company into the public space...companies are worth investing in (it's value)only if its going to be an innovation factory for years to come....We are in the early phases of Andreessen's "Software is Eating the World" thesis....best of companies AH is looking at today are unbelievably good at analytics. Good at the feedback loop created by analyzing data and feeding those number sback into the process in real time, running a continuous improvement loop....The best founders are artists in their domain. They operate instinctively in their industry because they are in touch with every relevant data point. They‘re able to synthesize in their gut a tremendous amount of data—pulling together technology trends, their companies’ capabilities, their competitor's’ activities, market psychology, every conceivable aspect of how you run a company.
Marc_Andreessen  Andreessen_Horowitz  venture_capital  start_ups  vc  HBR  hedge_funds  SOX  IPOs  lean  analytics  lessons_learned  fingerspitzengefühl  contextual_intelligence  counterintuitive  specificity  long-term  software  virtuous_cycles  software_is_eating_the_world  pairs  skills  founders  product-orientated 
december 2013 by jerryking
In Search of the Next Big Thing
| Harvard Business Review| An Interview with Marc Andreessen by Adi Ignatius
innovation  ideas  Silicon_Valley  Marc_Andreessen  Andreessen_Horowitz 
may 2013 by jerryking
In Mobile World, Tech Giants Scramble to Get Up to Speed - NYTimes.com
By CLAIRE CAIN MILLER and SOMINI SENGUPTA
Published: October 22, 2012

Intel made its fortune on the chips that power personal computers, and Microsoft on the software that goes inside. Google’s secret sauce is that it finds what you are looking for on the Internet. But the ground is shifting beneath these tech titans because of a major force: the rise of mobile devices.
Enlarge This Image
Isaac Brekken for The New York Times

These and other tech companies are scrambling to reinvent their business models now that the old model — a stationary customer sitting at a stationary desk — no longer applies. These companies once disrupted traditional businesses, from selling books and music to booking hotels. Now they are being upended by the widespread adoption of smartphones and tablets.

“Companies are having to retool their thinking, saying, ‘What is it that our customers are doing through the mobile channel that is quite distinct from what we are delivering them through our traditional Web channel?’...Yet the world’s shift to computing on mobile devices is taking a toll, including disappointing earnings reports last week from Google, Microsoft and Intel, in large measure related to revenue from mobile devices....Making money will now depend on how deftly tech companies can track their users from their desktop computers to the phones in their palms and ultimately to the stores, cinemas and pizzerias where they spend their money....Still, mobile provides huge opportunities for these businesses, industry analysts say. That is largely because people reveal much more about themselves on phones than they do on computers, from where they go and when they sleep to whom they talk to and what they want to buy....one of Google’s biggest challenges is tracking whether people make a purchase after they see a mobile ad. Unlike online, where Google knows if someone buys a camera after searching for it, the company does not know if someone searches for a Thai restaurant nearby and then eats there. That is why it is trying to follow people into the physical world, ...For investors and others trying to solve the riddle of making money on mobile users, Marc Andreessen, the venture capitalist, extolled the virtues of the mobile era this way: “We’re going to know a tremendous amount about people.”
mobile  mobile_phones  location_based_services  cyberphysical  disruption  competitive_landscape  large_companies  Intel  Microsoft  Google  Marc_Andreessen  mobile_first  reinvention  physical_world  information_gaps  special_sauce 
october 2012 by jerryking
In Facebook Deal for Instagram, Board Was All But Out of Picture - WSJ.com
April 18, 2012 | WSJ | By SHAYNDI RAICE, SPENCER E. ANTE and EMILY GLAZER.

"You want the board to provide caution to the CEO,'' said Ralph A. Walkling, executive director of the Center for Corporate Governance at Drexel University's business school. "They are the last line of defense for minority shareholders.''....Wall Street's traditional rules for valuing companies offer little help in putting a number on a company like Instagram. While the start-up, just 18 months old, had no revenue, its fast growth gave Mr. Systrom leverage. His company is strong where Facebook has been weak—on devices like the iPhone—and took aim squarely at Facebook users' favorite activity, sharing photos.

Instagram makes a smartphone "app" that lets people take photos, dress them up with special effects, and easily share them with friends. In the first three months of this year, its user base nearly doubled, to about 30 million, the company says....Mr. Zuckerberg, who planned to pay for Instagram mostly with stock, asked Mr. Systrom what he thought Facebook would be worth, the people said.
Facebook  mergers_&_acquisitions  M&A  CEOs  minority_shareholders  Instagram  Marc_Andreessen  Andreessen_Horowitz  boards_&_directors_&_governance  user_bases 
may 2012 by jerryking
Marc Andreessen on Why Software Is Eating the World - WSJ.com
My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.

More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense......Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the physical world. In today's cars, software runs the engines, controls safety features, entertains passengers, guides drivers to destinations and connects each car to mobile, satellite and GPS networks. The days when a car aficionado could repair his or her own car are long past, due primarily to the high software content. The trend toward hybrid and electric vehicles will only accelerate the software shift—electric cars are completely computer controlled. And the creation of software-powered driverless cars is already under way at Google and the major car companies.....Companies in every industry need to assume that a software revolution is coming. This includes even industries that are software-based today. Great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google owns a major handset maker).

In some industries, particularly those with a heavy real-world component such as oil and gas, the software revolution is primarily an opportunity for incumbents. But in many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity. Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic. [the great game] Joseph Schumpeter, the economist who coined the term "creative destruction," would be proud.....Finally, the new companies need to prove their worth. They need to build strong cultures, delight their customers, establish their own competitive advantages and, yes, justify their rising valuations. No one should expect building a new high-growth, software-powered company in an established industry to be easy. It's brutally difficult.
Marc_Andreessen  Andreessen_Horowitz  software  physical_economy  creative_destruction  Joseph_Schumpeter  software_is_eating_the_world  delighting_customers  physical_world  high-growth  Silicon_Valley  competitive_advantage  incumbents  the_great_game  electric_cars  cyberphysical 
august 2011 by jerryking
A Venture-Capital Newbie Shakes Up Silicon Valley - WSJ.com
MAY 10, 2011 | WSJ | By PUI-WING TAM, GEOFFREY A. FOWLER and AMIR EFRATI

A Venture-Capital Newbie Shakes Up Silicon Valley
venture_capital  silicon_valley  vc  Marc_Andreessen  Andreessen_Horowitz 
may 2011 by jerryking
The New New Andreessen - BusinessWeek
November 3, 2010, 4:50PM EST text size: TT
The New New Andreessen
With Andreessen Horowitz, visionary entrepreneur Marc Andreessen is
trying to reinvent himself as a top-tier venture capitalist and
world-class power broker

By Brad Stone
Andreessen_Horowitz  Marc_Andreessen  venture_capital  power_brokers  top-tier  visionaries 
november 2010 by jerryking
Marc Andreessen - Jul. 6, 2009
July 10, 2009 | Fortune | By Kevin Maney, contributor
Marc_Andreessen  Web_2.0  VC  venture_capital 
august 2009 by jerryking

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